Environmental Impairment Liability

Definition - What does Environmental Impairment Liability mean?

Environmental impairment liability is a charge against a person or entity whose business has caused damage to the natural surroundings, organisms, and vital life forms protected by the environmental laws of the land. This may be covered by the insurance of the person or the entity.

Insuranceopedia explains Environmental Impairment Liability

There are businesses that have the potential to damage or pollute the environment. Mining, if not efficiently monitored, can cause the release of toxins to its surroundings. To be more specific, the mining of coal for energy has caused environmental damage in the past. So, thorough precautions and certain standards are observed before coal mining operations start.

One of the precautions is by buying an environmental impairment liability policy which covers the owner or the organization that initiates such a business effort should pollution or environmental damage happen because of business operations. It will pay for the environmental damage caused by the operations, for one.